New tariff scheme approved to encourage solar development

A solar power project in the southern province of Ninh Thuận – a solar power hotspot. — Photo nguoilaodong.vn

HÀ NỘI — The Government has officially decided to approve a new feed-in-tariff mechanism to encourage development of solar power in Việt Nam.

Under the new scheme signed by Deputy Prime Minister Trịnh Đình Dũng, solar projects approved before November 23, 2019 and starting commercial operations between July 1, 2019 and December 31, 2020 will enjoy the new tariffs.

Specifically, the Government has fixed the tariffs for rooftop solar at VNĐ1,943 (8.38 US cents), floating solar at VNĐ1,783 (7.69 US cents) and ground-mounted solar power projects at VNĐ1,644 (around US 7.09 cents) for each kWh. The new tariff, which is 24 per cent lower than the earlier scheme, will be applied for 20 years starting May 22.

For other subsequent projects, the feed-in-tariffs shall be determined through bidding mechanism.

The decision was promulgated nine months after the 9.35 per cent rate, which expired on June 30 last year.

However, the purchase price of electricity from grid-connected solar power projects with planning and commercial operation dates before January 1, 2021 with the total cumulative capacity of not more than 2,000 MW in the southern Province of Ninh Thuận – a solar power hotspot – will be entitled to a preferential price of VNĐ2,086 (9.35 US cents) per kWh.

Organisations and individuals producing rooftop solar power are allowed to sell a part or all electricity output to Việt Nam Electricity (EVN), the country’s largest power company, or others who do not use EVN’s power grid.

It means that power sellers and buyers can negotiate their prices and ways to use electricity directly from the solar system themselves.

This decision has been awaited by large-scale solar investors and households and businesses investing in rooftop solar power because the old decision expired on July 1, 2019.

The approval of the new scheme comes after a new energy strategy released by the Government in February. The strategy aims to promote energy security and sustainable socio-economic development. The plan calls for a much larger share of clean energy in Việt Nam, accounting for 20 per cent of the country’s electricity from renewables by 2030.

As one of fastest growing countries in Asia, the country’s demand for energy is expected to reach about 130GW of electricity by 2030, more than double the current 54GW.

By the end of June, the country had a total of 82 solar power plants with a cumulative capacity of 4.46GW connected to the national grid. — VNS